Credit Suisse has published a speculative report on just what might happen to AT&T’s customer base if rival Verizon Wireless were to begin carrying the iPhone. According to Credit Suisse, 23% of AT&T iPhone users indicate they would move over to Big Red if the company was to offer Apple’s smartphone. This would translate into a 0.2% jump in churn for AT&T; from 1.1% to 1.3% in 2011-2012. The report also predicts that AT&T’s 2012 new net subscriptions would fall flat, but Verizon’s net adds would spike to around 4 million. Despite what seems like bad news, the analytics firm upgraded Ma’ Bells stock from neutral to outperform, saying, “it was undervalued compared to Verizon and more prone to upward earnings estimate revisions.” The report also notes that VZW’s cost-per-user would increase significantly upon offering the iPhone but also noted this increase would “snap back” the following year. More →
Weekend iPhone Rumors: Apple ordering "hoards" of CDMA chips, AT&T SEC filing hints at loss of exclusivity?
The iPhone 4 has been out for well over a month now, so it is only natural that iPhone rumors begin again, no? Over the weekend, two iPhone rumors of interest were spotted on the interwebs. The first comes via blog TechCrunch, TC is reporting that:
Sources with knowledge of this entire situation have assured me that Apple has submitted orders for millions of units of Qualcomm CDMA chipsets for a Verizon iPhone run due in December. This production run would likely be for a January launch, and I’d bet the phone is nearly 100% consistent with the current iPhone 4 (with a fixed internal insulator on the antenna).
We’ll let you decide how feasible a Verizon iPhone in December is, it isn’t like we’ve ever heard that before.
The next rumor come courtesy of an SEC filing from AT&T. In the filing, dated June 30th, the company writes:
In addition, offering a number of attractive handsets on an exclusive basis distinguishes us from our competitors. As these exclusivity arrangements end, we expect to continue to offer such handsets (based on historical industry practice), and we believe our service plan offerings will help to retain our customers by providing incentives not to move to a new carrier.
The rub here is that the only device that AT&T has exclusivity on, that would be worth mentioning in an SEC filing, is the iPhone (sorry BlackBerry Torch).
As with all rumors, these should be taken with a heavy dose of NaCl (that’s salt), they are rumors after all. More →
Thanks to a settlement of a pre-trial class action lawsuit, AT&T today agreed that it will provide unlocks to pre- and post-paid customers provided a specific set of criteria are met. Pre-paid customers must provide proof of purchase of their locked handset, while post-paid subscribers are required to have their accounts in good standing and have “completed a minimum of 90 days of active service.” That’s all fine and well, right? Well, there’s one sticky issue that’s sure to cheese off more than a few people. According to the settlement, “handsets for which AT&T has an exclusive sales arrangement with a manufacturer of less than 10 months will have to wait until the 10-month period expires before they can receive an unlocking code.” This means that if AT&T has an exclusivity period which extends beyond 10 months — as is the case with the iPhone and the BlackBerry Bold 9000 — then AT&T is not obligated to issue an unlock. Sucks, but not exactly surprising, now is it?
Three years. That’s how long it took for the world to get confirmation that the iPhone exclusivity deal Apple signed with AT&T back in 2007 was good for 5-years. Here’s how the info came about. Back in 2008, Apple’s legal team was in a courtroom in San Jose fending off a lawsuit which alleged that it was benefiting from an illegal monopoly over the iPhone, saying that AT&T’s 5-year exclusivity would really require iPhone owners to re-sign with AT&T for an additional 3-years after their initial 2-year contract had expired. This, in part, was Apple’s response:
[…] there was widespread disclosure of [AT&T’s] five-year exclusivity and no suggestion by Apple or anyone else that iPhones would become unlocked after two years. In fact, the iPhone box itself disclosed to the prospective purchaser that a “[s]ervice plan with AT&T [would be] required for cellular network capabilities on expiration of initial new two-year agreement.” This at-purchase information was more than enough disclosure to put consumers on notice that they might never have a choice of cellular service for their iPhone, and to thus preclude a Kodak-type aftermarket.
Moreover, it is sheer speculation –- and illogical -– that failing to disclose the five-year exclusivity term would produce monopoly power, i.e., would allow Apple, a brand new entrant in cell phones, to “exert raw power in the aftermarket without regard for commercial consequences in the foremarket.”
The only question now is whether or not the contract is still valid. As Engadget’s Nilay Patel points out, “Contracts can be canceled, amended, and breached in many ways, and AT&T’s spotty recent service history plus the explosion of the iPhone and the mobile market in general have given Apple any number of reasons to revisit the deal. In addition, the two companies obviously hit the negotiating table again to hammer out the iPad’s pricing plans, and there’s no way of knowing whether that deal involves the iPhone as well. But it’s nice to finally know for certain that AT&T’s initial iPhone exclusivity period was booked until 2012 — now we just have to see if all this recent chatter means something’s changed.”
With the BlackBerry Storm2 getting nice and official over night, we here at BGR thought that it would be nice for us to take a moment and focus on just what its launch means for our loyal readers that aren’t living in The New World. Earlier this week, UK-based The Guardian proclaimed that the Storm2 would be announced by both RIM and Vodafone this week. Clearly this was the case as we now know it will be arriving on or around the 26th of October, but its report missed out on one huge revelation — Vodafone’s exclusivity on the device will only last “a few weeks”. This of course paves the way for other carriers such as O2, Orange and T-Mobile to get in on the Storm action. While all of the aforementioned Storm2 candidate carriers have remained mom mum on the matter, The Guardian is hedging its bets on Orange carrying the Storm2 in time for Christmas. What does this all mean for the UK? Well, when one considers that every major carrier is going to be offering the iPhone 3GS and has the option of picking up the Storm2, it looks as if a major price war is about to erupt in time for the holidays.
The walls of exclusivity are crumbling in the UK. Less than 24 hours after Orange UK announced that it will be getting the iPhone, Vodafone UK and Vodafone Ireland have jumped on the Apple bandwagon as well. Voda’s “coming soon” pages are now live for the iPhone 3GS and interested parties can sign up for updates. No pricing or tariff details are available but rumors place the launch in early 2010. The best part of course, is with three major carriers soon to be promoting the iPhone in the UK, prices on the handset and its accompanying tariffs are expected to fall. Competition? iPhone? Hell must be getting pretty chilly. Oh and one last thing, before you start asking: the answer is “no” — Vodafone getting the iPhone does not necessarily mean that Verizon Wireless is next.
Thanks to everyone who sent this in!
It looks like some of the oft talked about and much maligned iPhone exclusivity deals are finally starting to fizzle out — Orange UK has announced that it will be offering both the iPhone 3G and iPhone 3GS to its customers “later this year.” As it currently stands, O2 has the sole rights to sell the iPhone in the UK. As many of you might recall however, T-Mobile was recently caught selling unlocked iPhones to its highest paying and most disgruntled customers, so perhaps it too will get in on the action in the near future. But back to Orange. The carrier has not yet released much in the way of specifics, having simply stated that “pricing, tariffs and availability dates will be released in due course.” Ordinarily we’d start to think what sort of implications this has for the American marketplace, but alas only one carrier has the appropriate bands and network technology to run the iPhone. *sigh*
Take that, FCC. Just as big brother starts to turn up the heat and examine wireless carrier exclusivity deals more thoroughly, Verizon Wireless has announced a new policy. Moving forward, any device Verizon negotiates exclusivity for will be a VZW exclusive for no more than six months — at least where carriers with less than 500,000 subscribers are concerned. Our guess: Verizon crunched some numbers and determined that sales drop off significantly enough after six months that it can throw tiny carriers a bone after that period of time — and it can use this move to look like the good guy. Big Red CEO Lowell McAdams had this to say:
Any new exclusively arrangement we enter with handset makers will last no longer than six months – for all manufacturers and all devices… Exclusivity arrangements promote competition and innovation in device development and design. This new approach is fair to all sides.
There you have it folks. If a tiny regional carrier is currently your home you should be getting your hands on new devices a bit more promptly now. If you’re on Sprint and are hoping for a hot new Verizon exclusive however, you’ll likely still have a while to wait.
It wasn’t exactly a surprise but it looks like there’s finally some good news to report for Pre hopefuls across the pond. That news: O2 and Movistar have been announced as the exclusive European carriers for the Palm Pre. To be available in the UK, Ireland, Germany and Spain before the year is through, pretty much no other specific information was given as to when or for how much the device would retail for in each market. Those of you who might be interested in importing a GSM Pre take note — the specific UMTS/HSDPA bands that it will be packing have not yet been listed so keep those fingers crossed.
The back and forth continues. Following Verizon Wireless CEO Lowell McAdam’s comment that the Pre would be hitting VZW shelves “over the next six months or so”, Sprint issued a brief official statement confirming that its Pre exclusivity runs through the end of 2009, at least. While specifics of the exclusivity deal remain a mystery for the time being, Sprint CEO Dan Hesse has just elaborated on the situation a bit. According to Cnet, Hesse stated the following at a press event with regard to McAdam’s Pre comment:
They need to check their facts. That just is not the case. Both Palm and Sprint have agreed not to discuss the length of the exclusivity deal. But I can tell you it’s not six months.
So, Verizon customers, it looks like you have a bit more waiting than anticipated before you can get your webOS on — at least where the Pre is concerned.
Following some comments yesterday from Verizon Wireless CEO Lowell McAdam, the Internet exploded. The highlight of course was the un-revalation that Verizon would be adding the Palm Pre to it’s portfolio once Sprint’s exclusivity expires. The part that grabbed everyone’s attention was the time frame however: “six months or so.” Could Sprint’s Pre exclusivity really be expiring later this year? According to a Sprint spokesman, no:
We have the Pre through 2009.
Nice — short and to the point. So to clarify McAdam’s comments from yesterday, it looks like Verizon will be offering the Pre once 2010 rolls around in seven months and change. Can you hold out?
France Telecom is not in a good place right now. Imagine the time, negotiations and bags of money resources it took to score iPhone 3G exclusivity on Orange for a five-year term all to see things evaporate thanks to the scrappy Bouygues Telecom. Appealing to the Competition Council, Bouygues contested that this exclusivity agreement seriously undermined competition in the mobile space due to the excessive length of the agreement. Despite obvious opposition from both France Telecom and Apple, the Competition Council concurred and decided in December to cap such exclusive agreements at a substantially abbreviated three months. Body blow! Needless to say, FT and Apple went right to work fighting the decision but an appeals court ruled today that the decision would be upheld. Upper cut! Apple and FT plan to take their appeal to Cour de Cassation, France’s Supreme Court, while Apple slyly plays both sides by undertaking negotiations with Bouygues to offer the iPhone 3G on its network. T.K.O. Apple stands to benefit either way of course and as such, the company appears to be fairly brazen in its handling of the situation. FT on the other hand, has everything to lose – including a healthy portion of its customer base on Orange. Bouygues, currently the number three operator in the French region, would undoubtedly couple iPhone availability with some incredibly attractive rates to lure customers away. Hmm. We have to wonder what AT&T’s 2008 would have looked like with the iPhone on multiple US carriers…
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